Bandera Holds 5.7% in Kenneth Cole, Says Bid `Inadequate'

May 18 (Bloomberg) -- Bandera Partners LLC, a New York-based investing firm, has built a 5.7 percent stake in Kenneth
Cole Productions Inc. and said a buyout offer from its founder
is “inadequate” given the company’s potential growth.

Bandera delivered a letter to a special committee of
Kenneth Cole’s board on May 2 to express its concern that the
shares remain undervalued and regarding the “low per share”
offer from founder Kenneth Cole, it said in a regulatory filing
today. Bandera said it owns 584,221 shares and Managing Partner
Jefferson Gramm owns 5,000 shares in Kenneth Cole.

Cole, who is chairman and 47 percent owner of the clothing
and shoe retailer, offered $15 a share in February to buy the
remaining stake of the company he founded, which was 18 percent
higher than stock price’s price in the 20 days before the
announcement. Cole needs majority approval from remaining
shareholders to complete the purchase.

Bandera said the Cole’s bid is “inadequate given the low
valuation of the company and its ample growth opportunities,”
according to today’s filing. “Bandera Partners communicated its
hope that all shareholders will be protected as the independent
Board of Directors evaluate the going forward proposal” and
determine the company’s future.

Kenneth Cole slid 2.2 percent to $14.42 at the close in New
York today. The stock closed below the proposed buyout price
yesterday for the first time since the offer was made on Feb 24.
The shares have gained 36 percent for the year.